Labelling imported medicines did not amount to manufacture, making the excise demand unsustainable for the covered period.

Affixing stickers or labels on imported medicines was treated as not amounting to manufacture under Note 5 to Chapter 30 for the period covered by the Trade Notice dated 21-8-96. The Trade Notice, issued pursuant to the Board's circular, expressly clarified that labelling or pasting stickers on imported medicines would not constitute manufacture. As the clarification was in force during the relevant clearances, the Board's circular and the Trade Notice were binding on the Revenue, and the excise demand for that period was unsustainable.

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Issues: Whether affixing stickers or labels on imported medicines during the relevant period amounted to manufacture so as to attract central excise duty under Note 5 to Chapter 30 of the Central Excise Tariff Act, 1985.

Analysis: The clearance of the imported medicines fell within the period when the Trade Notice dated 21-8-96, issued pursuant to the Board's circular, was in force. That notice expressly clarified that labelling or pasting of stickers on imported medicines would not amount to manufacture for the purpose of Note 5 to Chapter 30. The Board's circular and the Trade Notice issued in pursuance of it were binding on the Revenue, and the demand could not be sustained for the period covered by that clarification.

Conclusion: Affixing stickers on the imported medicines did not amount to manufacture for the relevant period, and the demand was unsustainable.

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